1SEM Finals Reviewer 4IE PDF

1SEM FINALS REVIEWER 4IE-A SCM Transportation -Forms the backbone of supply chain management -Primary Function is to bridge the gap between each segment-from suppliers to Transportation distributio...

1SEM FINALS REVIEWER 4IE-A SCM Transportation -Forms the backbone of supply chain management -Primary Function is to bridge the gap between each segment-from suppliers to Transportation distribution center to consumers. Efficient Transportation -Ensures timely and safe arrival of goods ASPECTS OF TRANSPORTATION -Transportation reduces lead time by enabling faster connections between supply Time Efficiency chain nodes Cost Management -Choosing optimal transport modes and routes reduces overall logistics costs Flexibility -Ability to adapt to changing demands ----- -Promises two-day or same-day delivery in select locations using air, road, and local Amazon Prime carriers for speed Walmart’s Private Fleet -Saves costs by optimizing delivery routes and filling trucks fully before dispatch UPS -Adjusts routes and resources based on demand peaks, such as the holiday season ----- -Is crucial in fashion and e-commerce sectors for inventory turnover and customer Speed of Transportation satisfaction Reliability and Temperature- -Is essential in food and pharmaceutical sectors to maintain product quality and Controlled transportation regulatory compliance ---- Transportation Models -Represent the various approaches taken to move goods within a supply chain 4 PRIMARY TRANSPO MODES 1. Air 1. Fastest in Speed, High Cost, Ideal for urgent, value, low volume goods 2. Road 2. Moderate Speed and Cost, Flexible, short-haul, perishable goods 3. Rail 3. Moderate Speed , Low Cost, Heavy, Bulk goods, long distances 4. Sea (Maritime) 4. Slow Speed, Lowest Cost, Bulk international goods like oil, steel, automobile Other Transpo Modes Pipeline -Slow Speed, High Cost, for Transporting liquids and gases -Speed and Cost Varies, ideal for domestic and international freight, example for - Intermodal goods loaded into standardized containers Rail-to-Sea -Allows rail to transport bulk goods to a port for trans-oceanic shipping -Involves creating a system of routes, hubs, and logistics nodes that allow for efficient Transportation Network Design movement of goods. Types of Transportation Network -Each spoke represents a delivery direction, while the hub, also known as a distribution 1.Hub and Spoke Model center, is at the center of the wheel Advantages: Efficient Last-Mile Delivery Process Optimal Planning of Delivery Route Cost Reduction in Supply Chain Operations Environmental Sustainability and Carbon Footprint Reduction ---- -This business adapted the hub and spoke model and guarantees prompt and effective Amazon’s Fulfillment Centers order fulfillment by placing the hubs in key locations and streamlining delivery routes -Adapted the hub and spoke strategy for international transportation of packages, FedEx and UPS enables effective shipment consolidation, sorting, and delivery route optimization -Hub and spoke model have long been used by the aviation sector to increase Airlines and Airports connectivity and optimize aircraft routes. Challenges 1.Dependence on Hubs 2.Potential Delays 3. High Upfront Costs 4. Resource Mismanagement ---- 2. Point-to-Point (P2P) Model -This network connects directly to a set of locations without interrupting services (e.g. pick up or drop off), even if the route may not be direct Main Advantages Faster Travel Time Delays have lower impact ---- 3. Hybrid Model -Systems that consist of adopting multiple channel distribution systems to reach one or more clients -Although this system may resemble multimodal transportation, it entails a strategic partnership between two companies aimed at achieving a seamless, collaborative, and resilient logistics network. Key Factors in Network Design Volume -This factor encompasses the number of shipments and the quantity of goods that move through the network Geography -This refers to the special distribution of node and transport hubs within the network Demand Patterns -This factor addresses seasonality and fluctuations in demand. Entails recognizing and planning for identified patterns ---- Information Technology -Has transformed transportation logistics by enabling real -time tracking, optimizing routes, and enhancing overall visibility and transparency Key IT applications in transportation: 1.Real-Time tracking and visibility -GPS and IoT devices monitor shipments, allowing companies to share delivery updates with customer Benefits: Enhanced visibility and customer satisfaction 2.Transportation Management -This automates processes like route planning, carrier selection, and load optimization Systems (TMS) Benefits: Improved route planning and resource allocation 3.Big Data and Analytics -Data collected from sensors, historical delivery times, and other sources optimize route planning and resource allocation Benefits: Predictive insights for better decision-making Recent Transportation Management Software *FreightPOP -Cloud-based TMS for integrating transportation modes (air, ground, ocean, rail), offering rate shopping, tracking, and analytics for centralized logistics *Rose Rocket -TMS focused on real-time visibility, dispatch, and customer/partner integration; includes driver mobile app and invoicing customization *MercuryGate TMS -Scalable multimodal TMS supporting domestic and international logistics ; includes predictive analytics and rate management for 3PLs and brokers *Shipwell -Cloud-based TMS with visibility, automation, and analytics; designed for medium to large enterprises needing scalable freight management *Uber Freight -AI-powered TMS (formerly Transplace) with automated billing, tracking, and freight visibility, suited for medium to large shippers ---- WEEK 15 ---- Supply Chain Strategies -Is integral to aligning a company’s operation with its overall business goals -It dictates how products/services move through the stages from raw materials to end customers impacting cost efficiency, responsiveness, customer satisfaction Strategic Decision -In supply chain, this involves decision that have long-term implications for the entire network -Are vital for optimizing operational flow and aligning resources with business goals Facility Location Decision -Is Foundational in supply chain strategy, as the placement of facilities determines a company’s ability to serve its customers efficiently Strategic placement -Can significantly reduce transportation costs and improve delivery times Inventory Management A key decision that addresses the need for sufficient stock to meet demand without incurring unnecessary holding costs. Efficient inventory management -Requires a balance, ensuring that products are available when needed but avoiding excessive stock that could lead to high storage costs or obsolescence Selecting the appropriate -Is crucial for ensuring timely delivery of goods at a reasonable cost. transportation modes Technology Integration -Plays an indispensable role in modern supply chains, allowing for greater visibility, data-driven decision making, and streamlined communication across partners. ERP Enterprise Resource Planning SCM Supply Chain Management ERP & SCM Its uses are to track goods, manage inventory, & process order with minimal delays Strong Supplier Relationships -Is essential for creating a reliable supply chain Collaborative relationships -Allow companies and suppliers to synchronize production schedules & communicate effectively Sustainability Practices -Is driven by increasing consumer awareness and regulatory pressures -Companies progressively incorporates environmentally friendly practices such as reducing carbon emissions and minimizing waste FRAMEWORKS Supply Chain Operations -Is one of the most widely used frameworks in supply chain management Reference Model (SCOR Model) -Developed by Supply Chain Council -Provides a standardized approach for assessing and improving supply chain performance. 6 MAIN COMPONENTS OF SCOR 1. Plan -Outlines the steps involved in creating operational road maps for supply chain , involves identifying requirements, obtaining data, balancing requirements and resources 2. Source -Explains procedures involved in acquiring, placing order, scheduling, delivering, receiving, and transferring goods and services 3. Order -Actions involved in a customer’s purchase of goods and services, including details like locations, payment options, costs, fulfillment status, and any additional order information 4. Transform -Encompasses activities involved in planning and producing products, which include manufacturing, assembly and disassembly, maintenance, repair, overhaul, and additional related processes 5. Fulfill -Refers to the activities involved in completing customer orders or services, such as organizing delivery schedules, picking, and packing items, shipping, installation, commissioning, and billing 6. Return -Activities related to the reverse movements of goods and services, including any service components from the customer through the network SCOR Model -Helps companies assess each stage of their supply chain and provides a benchmarking tool for identifying best practices -It is beneficial for companies looking to enhance operational efficiency and minimize costs across the supply chain Six Sigma and Lean Manufacturing -Are both powerful frameworks that enhance efficiency and quality in supply chain management Six Sigma -Focuses on reducing defects and minimizing variability through a systematic, data- driven problem-solving process known as DMAIC (Define, Measure, Analyze, Improve, Control) Lean Manufacturing -Emphasizes waste reduction and process simplification to align production closely with actual demand. This method is particularly beneficial in Just-in-Time (JIT) manufacturing environments. Vendor Managed Inventory (VMI) -A collaborative approach where the supplier manages and replenishes inventory levels for the retailer or buyer, often based on real-time data from customer’s inventory system. -Is effective for managing strategic decisions around inventory management and supplier relationships by minimizing stockouts, reducing lead times, and improving demand forecast accuracy HOW VMI WORK?? Monitoring Inventory Levels Generating Purchase Orders Shipping and Replenishment Collaborative Planning, -Is a Framework that promotes collaboration between supply chain partners, Forecasting, and Replenishment specifically in demand forecasting and inventory management (CPFR) -This model is particularly useful for reducing the Bullwhip effect, as it fosters real -time data sharing. Triple-A Supply Chain Model -Proposed by Hau L. Lee. -Emphasize Three (3) Factors- Agility, Adaptability, and Alignment-which are essential for a responsive and resilient supply chain Total Cost of Ownership (TCO) This framework is used to evaluate the true cost of strategic decisions in the supply chain, beyond the immediate purchase price ------ Push and Pull Strategy -Represents two distinct approaches to managing demand and inventory flow. Push Strategy -A demand-forecast-driven approach; Production and distribution are guided by anticipated customer demand EXAMPLES OF PUSH STRAT: Tesco Lotus of Southeast Asia -Used push strategy for staple items, anticipating demand and filling shelves based on projected sales, thereby achieving economies of scale in production and logistics Pull Strategy -Is particularly effective for standardized products with relatively stable demand; Demand-Driven and operates based on ACTUAL customer orders rather than forecasts EXAMPLES OF PULL STRAT: Dell Computers -Used pull strategy for their custom-configured computers, customer placed orders with specific requirement, and begins upon customer order only thereby reducing excess inventory and responding flexibly to demand changes Hybrid push-pull strategy -Strategic approach that combines elements of both push and pull strategies, enabling company to balance efficiency with responsiveness to customer demand -In this model, the initial production and inventory stages operates on a PUSH basis, driven by demand forecasts, while later stages are managed on a PULL basis, responding to actual customer orders EXAMPLES OF HYBRID: Dell Computers: Build-to-Order -Dell pre-purchases and stock components (such as motherboard, processors, etc.) based on demand forecast (Push), while production operates upon customer orders only (Pull) Automotive Industry: Toyota’s Lean -Similar to Dell, Toyota pre-purchases and stock components, and production only Manufacturing operates upon customer order BENEFITS OF HYBRID PUSH-PULL: 1. Cost Efficiency -Due to ability of bulk-purchasing and production of standardized components 2.Responsiveness -Due to quick adjustments to actual customer demand 3.Reduced Lead Times -Due to holding generic or basic inventory close to demand points 4.Risk Mitigation -Because hybrid strategy balances the risk of overstocking and stockouts Economic Order Quantity (EOQ) -is a widely used formula to determine the optimal order size that minimizes total cost of holding and inventory costs. Reorder Point (ROP) -Calculates the inventory level at which a new order should be placed to avoid stockouts, factoring in lead time Safety Stock -is often calculated with a buffer based on statistical variability in demand or lead time Service Level and Safety Stock -To ensure product availability and reduce the likelihood of stockouts, safety stock can Calculation be calculated based on a target service level. Service Level -Determines the probability that demand will not exceed supply during lead time Z-Score -Represents the desired service level probability Safety Stock calculation -Is especially useful in pull strategies to ensure stock availability with out excessive cost Forecasting Demand -Is critical in push strategies to anticipate future needs Statistical Methods of Forecasting Demand: Bullwhip effect calculation Bullwhip ratio greater than 1 -Indicated amplification, showing how minor fluctuations at the consumer level led to amplified ordering patterns further up the supply chain Bullwhip Effect -Is a phenomenon where minor fluctuations in customer demand at the retail level can lead to increasingly larger fluctuations in orders up the supply chain Demand Forecasting errors -Common cause of bullwhip effect Price Fluctuations -Common cause of bullwhip effect MITIGATING THE BULLWHIP EFFECT THROUGH: Collaborative Planning Forecasting -Through this, companies can synchronize forecasts and production schedules, and Replenishment (CPFR) reducing the variability in demand and improving response times to actual customer needs Vendor Manage Inventory (VMI) -Through this, suppliers take responsibility for managing inventory levels at the retailer ’s end, often using real-time data to align inventory with demand more precisely Just-in-Time (JIT) -Through this, company minimizes cost by delivering products only when needed Advanced Data Analytics -Through this, companies anticipate demand patterns more accurately, allowing for a faster response to market changes Hybrid Push-Pull Strategy -This strategy may push standardized products into regional warehouses but use a pull approach for customer-specific final assembly, combining the benefits of forecast- driven production with flexibility in meeting unique customer demands WEEK 16-17 CRM_________________ Customer Relationship Management -A strategic approach that aims to enhance interactions between suppliers, (CRM) manufacturers, distributors, and consumers, optimizing supply chain activities based on customer insights and demand patterns -In supply chain management, this enable companies to streamline inventory management, refine demand forecasting, improve order fulfillment, and respond to customer needs more effectively CRM AND SRM (Supplier -Are complementary strategic approaches within supply chain management, both Relationship Management) focused on building strong & mutual relationship between groups 6 CORE PROCESSES BRIDGE CRM AND SRM: 1.Customer Service Management -Ensure seamless communication with both suppliers and customers 2.Demand Management -Leverages data from CRM and SRM to forecast needs accurately 3.Order Fulfillment -Facilitated by coordinating supplier input and customer needs 4.Manufacturing Flow Management -Involves planning production to meet customer demand 5.Product Development and -Relies on feedback from CRM and SRM to innovate and launch products that meet Commercialization market needs 6.Returns Management -Addresses product returns in an efficient manner, involving both supplier and customers to ensure smooth process Customer Segmentation -Involves categorizing customers into distinct groups based on specific characteristics -This is essential to allow companies to prioritize resources, customize service delivery, and manage supply chain processes according to each segment ’s needs Supplier Segmentation Matrix -Provides a strategic framework for classifying suppliers based on two dimensions: Supplier Risk (y axis) and Potential to Add Value (x axis) 4 DISTINCT CATEGORIES of the Matrix: 1.Strategic Suppliers -High Supply Risk, High Value Addition 2.Leverage Suppliers -Low Supply Risk, High Value Addition 3.Bottleneck Suppliers -High Supply Risk, Low Value Addition 4.Routine Suppliers -Low Supply Risk, Low Value Addition Segmentation Models and Impact Effective Segmentation -Helps align the supply chain with customer expectations, reduce waste, and optimize order fulfillment processes CRM Planning and Software -Entails setting clear objectives, integrating CRM into existing supply chain processes, and identifying metric that reflect both customer satisfaction and operational efficiency RECENT TRENDS: 1.AI-Driven CRM Solutions -Enhances SCM by automating demand forecasting, predictive analysis, and customer interaction 2.IoT-Integrated CRM Systems -Enables real-time tracking of goods, providing critical information during transit 3.Customer Self-Service in CRM for -Allows customers to check order status, access support, and manage returns SCM independently EXAMPLES AND BEST PRACTICES IN CRM-DRIVEN SCM 1.Amazon: Personalization and -Best Practices in CRM strategy applied: Data-Driven Supply Chain Advanced Data Analytics to capture insights on customer preferences and feedback, Inventory Management to meet the promise of fast delivery, Customer Experience Focus through automated CRM notifications to keep customers informed about their order status and delivery times 2.Coca-Cola: CRM-Enabled Demand -Best Practices in CRM strategy applied: Forecasting Localized Production and Distribution to help identify regional preferences and reduce transportational costs Demand Forecasting for Seasonal Variations to anticipate demands during holidays Customer Feedback Integration to provide valuable input for product improvement 3.SM Retail: Integrated CRM in -Best Practices in CRM strategy applied: Inventory Demand Inventory Optimization to analyze customer buying behavior  Loyalty Programs for Demand Insights to collect valuable customer data on shopping patters which feeds to demand forecasting and inventory planning Personalized Promotion to improve engagement and driving in-store based on customer preferences KEY BEST PRACTICES IN CRM FOR SUPPLY CHAIN (PHILIPPINE FOCUS) Data-Driven Demand Planning -Used by SM Retail and Jollibee to align inventory levels and match demand patterns Customer-Centric Inventory -Used by SM Retail to adjust stocks in specific locations based on local demand Management patterns, ensuring product availability aligning with customer expectation Responsive Feedback Integration -Used by Jollibee and Manila Water to identify service improvements, align supply chain functions and provide quick responses to customer needs Personalization of Service -Used by SM Retail and Coca Cola to build stronger relationships, increase rep eat business, and streamline inventory management. PASKO NA!